Horngrens Accounting Global Edition 10Th Edition Nobles Test Bank Full Chapter PDF

Horngrens Accounting Global Edition
10th Edition Nobles Test Bank

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Horngren's Accounting, 10e, Global Edition (Nobles/Mattison/Matsumura)
Chapter 9 Receivables
Learning Objective 9-1
1) The receivables of an organization can be categorized into accounts receivable, notes receivable, and
other receivables.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
AICPA Functional: Measurement
2) A company will have receivables whenever it sells goods or services on credit.

Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
3) The two major types of receivables are interest receivable and taxes receivable.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
4) A receivable can be described as a monetary claim against a business or an individual.

Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
5) A debtor is a party to the transaction who will receive the cash for the transaction at a later date.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
6) Accounts receivable are also known as trade receivables.

Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
1
Copyright © 2015 Pearson Education, Inc.
7) The collection period of accounts receivable is usually long therefore it is classified as a long-term asset
in the balance sheet.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
8) Notes receivable represents an undertaking by a debtor to pay a fixed amount along with interest at a
certain future date.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
9) The terms of payment for a note receivable are longer than that of an account receivable.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
10) Dividends receivable, interest receivable, and taxes receivable are commonly categorized as other
receivables.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
11) In order to exercise effective internal control over receivables the credit department must have access
cash.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
12) Businesses must maintain a single account receivable account for all customers.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
2
13) Individual customer accounts of accounts receivable are known as subsidiary accounts.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
14) Sales through credit cards and debit cards are journalized in the same way as credit sales are
journalized.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
15) Sales through credit cards or debit cards transfer the risk of collection of receivables from the seller to
the card issuer.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
16) Factoring is one of the options available to a business to reduce the risk of uncollectible accounts
receivable.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
17) When a business pledges its accounts receivable, it transfers the right to collect cash from customers to
the bank.
Answer: FALSE
Diff: 1
LO: 9-1
AACSB: Concept
18) When a business accepts payment through credit cards or debit cards, it has to pay a fee to the credit
card or debit card processor.
Answer: TRUE
Diff: 1
LO: 9-1
AACSB: Concept
3
19) Which of the following is included in the category of other receivables?
A) interest receivable
B) accounts receivable
C) notes receivable
D) investments
Answer: A
Diff: 1
LO: 9-1
AACSB: Concept
20) Which of the following statements is true?

A) Accounts receivable are more liquid than cash.
B) Notes receivable are always due in 30 days.
C) Notes receivable are longer in term than accounts receivable.
D) Accounts receivable are liabilities.
Answer: C
Diff: 2
LO: 9-1
AACSB: Concept
21) Which of the following is an example of exercise of internal control over receivables?
A) separate cash collection and credit allowance duties
B) extend credit only to customers who are most likely to pay
C) pursue collection from customers to maximize cash flow
D) ensure quick recovery of accounts receivable
Answer: A
Diff: 2
LO: 9-1
AACSB: Concept
22) Which of the following is a disadvantage of accepting credit cards or debit cards for a business?
A) It will have to bear the responsibility of collecting money from the customer.
B) It will have to bear the risk of nonpayment.
C) It will have to pay a certain amount as processing fee.
D) It will have to check the credit ratings of customers.
Answer: C
Diff: 1
LO: 9-1
AACSB: Concept
4
23) Tom's Fit Inc. a readymade garment seller accepts payment through credit cards. During the month of
August, the card sales amounted to $12,000. The processor charges a 3% fee. Assume that the processor
nets the deposits. Provide the journal entry for card sales revenue.
Answer:
Cash 11,640
Credit Card Expense 360
Sales Revenue 12,000
Diff: 2
LO: 9-1
AACSB: Concept
24) Tom's Fit Inc. a readymade garment seller accepts payment through credit cards. During the month of
August, the card sales amounted to $12,000. The processor charges a 3% fee. Assuming that the credit
card processor uses the gross method, provide the journal entries for the receipt of funds and the
collection of fees at the end of the period.
Answer:
Cash 12,000
Sales Revenue 12,000
Credit Card Expense 360

Cash 360
Diff: 2
LO: 9-1
AACSB: Concept
1) The direct write-off method of accounting for uncollectible receivables is primarily used by small, non-
public companies.
Answer: TRUE
Diff: 1
LO: 9-2
AACSB: Concept
2) The expense associated with the cost of uncollectible accounts receivable is known as bad debts
expense.
Answer: TRUE
Diff: 1
LO: 9-2
AACSB: Concept
5
3) Companies that follow GAAP are required to use the direct write-off method for uncollectible accounts
receivable.
Answer: FALSE
Diff: 1
LO: 9-2
AACSB: Concept
4) The direct write-off method is only acceptable for companies that have very few uncollectible
receivables.
Answer: TRUE
Diff: 1
LO: 9-2
AACSB: Concept
5) The direct write-off method for uncollectible accounts violates the matching principle.
Answer: TRUE
Diff: 1
LO: 9-2
AACSB: Concept
6) The following information is from the records of Armadillo Camera Shop:
Accounts receivable, December 31, 2014 $80,000 (debit)

Net credit sales for 2014 165,000
Accounts written off as uncollectible during 2014 15,000
Cash sales during 2014 40,000
The company uses the direct write-off method for bad debts. What is the amount of bad debts expense?
A) $80,000
B) $40,000
C) $16,800
D) $15,000
Answer: D
Diff: 2
LO: 9-2
AACSB: Concept
6
7) For a company with significant uncollectible receivables, the direct write-off method is unsuitable
because:
A) it overstates liabilities on the balance sheet.
B) it violates the matching principle.
C) direct write-offs would be immaterial.
D) it is not allowed for tax reasons.
Answer: B
Diff: 1
LO: 9-2
AACSB: Concept
8) Under the direct write-off method, the entry to write off an uncollectible account will include:
A) a debit to Bad Debts Expense account.
B) a debit to the customer's Account Receivable.
C) a credit to the Allowance for Bad Debts.
D) No entry is made to write off uncollectible accounts.
Answer: A
Diff: 1
LO: 9-2
AACSB: Application
9) Under the direct write-off method, which of the following is included in the entry to write off an
uncollectible account?
A) a credit to the Allowance for Bad Debts
B) a credit to the customer's Account Receivable
C) a debit to Allowance for Uncollectible Accounts
D) No entry is made to write off uncollectible accounts.
Answer: B
Diff: 1
LO: 9-2
AACSB: Application
10) When a company is using the direct write-off method, and an account is written off, the journal entry
consists of a:
A) debit to Accounts Receivable and a credit to Cash.
B) credit to Accounts Receivable and a debit to Bad Debts Expense.
C) debit to the Allowance for Bad Debts and a credit to Accounts Receivable.
D) credit Accounts Receivable and a debit to Interest Expense.
Answer: B
Diff: 1
LO: 9-2
AACSB: Application
7
11) Charles and Charms, a merchandiser, has an account receivable for $125 which they now decided to
be uncollectible. The merchandiser uses the direct write-off method. Which of the following entries is
required to record the write-off?
A)
Bad Debts Expense 125
Accounts Receivable 125
B)
Cash 125
C)
Allowance for Bad Debts 125
D)
Answer: A
Diff: 2
LO: 9-2
AACSB: Application
8
12) On January 1, Davidson Services has the following balances:
Davidson has the following transactions during January: Credit sales of $100,000, collections of credit
sales of $85,000, and write-offs of $15,000. Davidson uses the direct write-off method. At the end of
January, the balance in Accounts Receivable is:
A) $16,000.
B) $24,000.
C) $68,000.
D) $28,000.
Answer: B
Explanation: B)
Diff: 2
LO: 9-2
AACSB: Application
9
13) On January 1, Davidson Services has the following balances:
Davidson has the following transactions during January: Credit sales of $100,000, collections of credit
sales of $85,000, and write-offs of $15,000. Davidson uses the direct write-off method. At the end of
January, the balance in Bad Debts Expense is:
A) $16,000.
B) $17,000.
C) $12,000.
D) $15,000.
Answer: D
Explanation: D)
Diff: 1
LO: 9-2
AACSB: Application
14) Which of the following statements is true of the direct write-off method?
A) GAAP requires public companies to follow the direct write-off method.
B) It provides better matching of revenues with expenses.
C) It results in more accurate net income than any other method.
D) It is only suitable for small companies that have very few uncollectible receivables.
Answer: D
Diff: 1
LO: 9-2
AACSB: Concept
10
15) A company with significant amounts of accounts receivable, experiences uncollectible accounts from
time to time. If the company uses the direct write-off method, the effect of writing off of an uncollectible
receivable will be a(n):
A) reduction in net income.
B) nil on net income.
C) increase in total assets.
D) generation of positive cash flow.
Answer: A
Diff: 2
LO: 9-2
AACSB: Concept
16) Give the journal entry to record an uncollectible account receivable using the direct write-off method.
Answer:
Bad Debts Expense XX
Accounts Receivable XX
Diff: 1
LO: 9-2
AACSB: Application
17) Sun Inc. had completely written off the account of one of its old customers, Brad, in 2014 for $500. On
January 21, 2015, Brad unexpectedly repaid his debt in full. The company uses the direct write-off method
to account for uncollectible receivables. Journalize the entries required for Sun Inc. on January 21, 2015.
Answer:
Accounts Receivable-Brad 500
Cash 500
Diff: 1
LO: 9-2
AACSB: Application
1) The allowance method violates the matching principle.

Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
11
2) A method of accounting for uncollectible receivables in which the company estimates bad debts
expense instead of waiting to see which customers the company will not collect from is known as the
allowance method.
Answer: TRUE
Diff: 1
LO: 9-3
AACSB: Concept
3) Under both the allowance method and the direct-write off method of accounting for uncollectible
accounts, the amount of bad debts expense is to be estimated at the end of each accounting period.
Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
4) The Allowance for Bad Debts can be calculated as a specific percentage of credit sales and is a contra
account to Accounts Receivable.
Answer: TRUE
Diff: 1
LO: 9-3
AACSB: Concept
5) The net realizable value of Accounts Receivable is calculated by subtracting Bad Debts Expense from
Accounts Receivable.
Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
6) The percent-of-sales method computes bad debts expense as a percentage of net cash sales.
Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
7) The percent-of-sales method to compute uncollectible accounts is also known as the balance sheet
approach.
Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
12
8) The percent-of-receivables method computes bad debts expense as a percentage of accounts receivable.
Answer: FALSE
Diff: 1
LO: 9-3
AACSB: Concept
9) The aging-of-receivables method is a balance sheet approach of estimating uncollectible accounts.

Answer: TRUE
Diff: 2
LO: 9-3
AACSB: Concept
10) Which of the following are the two methods of accounting for uncollectible receivables?
A) direct write-off method and liability method
B) asset method and sales method
C) allowance method and liability method
D) allowance method and direct write-off method
Answer: D
Diff: 1
LO: 9-3
AACSB: Concept
11) Which of the following are two methods of estimating uncollectible receivables?
A) allowance method and amortization method
B) aging-of-accounts-receivable method and percent-of-sales method
C) gross-up method and direct write-off method
D) direct write-off method and percent-of-completion method
Answer: B
Diff: 1
LO: 9-3
AACSB: Concept
12) The entry to write off an account receivable under the allowance method will:
A) reduce net income.
B) have no effect on net income.
C) increase total assets.
D) increase net income.
Answer: B
Diff: 2
LO: 9-3
AACSB: Concept
13
13) The following information is from the records of Armadillo Camera Shop:
Accounts receivable, December 31, 2015 $20,000 (debit)

Allowance for Bad Debts, December 31, 2015
prior to adjustment 600 (debit)
Accounts written off as uncollectible during 2015 350
Bad debts expense is estimated by the aging-of-accounts-receivables method. Management estimates that
$2,850 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after
the adjustment for bad debts.
A) $17,750
B) $17,150
C) $16,550
D) $13,000
Answer: B
Explanation: B) $20,000 - $2,850 = $17,150
Diff: 2
LO: 9-3
AACSB: Application
14) GAAP requires most companies to use the:

A) direct write-off method to evaluate bad debts.
B) allowance method to evaluate bad debts.
C) amortization method to evaluate bad debts.
D) 360-day method to evaluate bad debts.
Answer: B
Diff: 1
LO: 9-3
AACSB: Concept
14
15) The Allowance for Bad Debts account has a credit balance of $2,000. The company's management
estimates that 2% of net credit sales will be uncollectible for the year 2015. Net credit sales for the year
amounted to $250,000. What will be the amount of Bad Debts Expense reported on the income statement
for 2015?
A) $5,000
B) $3,075
C) $2,875
D) $2,675
Answer: A
Explanation: A)
$250,000 × 0.02 = $5,000

Diff: 1
LO: 9-3
AACSB: Application
16) The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad
debt expense. The company's management estimates that 2% of net credit sales will be uncollectible for
the year 2015. Net credit sales for the year amounted to $250,000. What will be the balance of the
Allowance for Bad Debts reported on the balance sheet at December 31, 2015?
A) $7,275
B) $3,075
C) $7,000
D) $5,285
Answer: C
Explanation: C)
Diff: 2
LO: 9-3
AACSB: Application
15
17) The Allowance for Bad Debts has a credit balance of $9,000 before the adjusting entry for bad debt
expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging
method, the company's management estimates that uncollectible accounts will be $15,000. What will be
the amount of bad debts expense reported on the income statement?
A) $24,000
B) $6,000
C) $15,000
D) $9,000
Answer: B
Explanation: B)
*$15,000 - $9000 = $6,000

Diff: 2
LO: 9-3
AACSB: Application
debt expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging
the balance of the Allowance for Bad Debts reported on the balance sheet?
A) $15,000
B) $14,900
C) $15,900
D) $14,100
Answer: A
Explanation: A)
Diff: 2
LO: 9-3
AACSB: Application
16
19) The Allowance for Bad Debts account has a debit balance of $9,000 before the adjusting entry for bad
debt expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging
the amount of Bad debts expense reported on the income statement?
A) $4,000
B) $24,000
C) $6,000
D) $15,000
Answer: B
Explanation: B)
$15,000 + $9,000 = $24,000

Diff: 2
LO: 9-3
AACSB: Application
20) The Allowance for Bad Debts account has a debit balance of $6,000 before the adjusting entry for bad
debt expense. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's
management estimates that uncollectible accounts will be $10,000. What will be the amount of the
adjustment in the Allowance for Bad Debts account?
A) $15,250
B) $10,000
C) $14,900
D) $16,000
Answer: D
Explanation: D)
Diff: 2
LO: 9-3
AACSB: Application
17
21) The following information is from the 2015 records of Armand Camera Shop:
Accounts Receivable, December 31, 2015 $40,000 (debit)

prior to adjustment 1,500 (debit)
Bad debts expense is estimated by the percent-of-sales method. The management estimates that 3% of net
credit sales will be uncollectible. Calculate the amount of bad debts expense for 2015.
A) $5,250
B) $3,450
C) $2,250
D) $2,850
Answer: A
Explanation: A)
Calculations: $175,000 × .03 = $5,250

Diff: 1
LO: 9-3
AACSB: Application
18

Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $5,000 of
accounts receivable will be uncollectible. Calculate the amount of bad debts expense for 2015.
A) $7,000
B) $6,500
C) $6,450
D) $5,250
Answer: B
Explanation: B)
Diff: 2
LO: 9-3
AACSB: Application
19

Bad debts expense is estimated by the percent-of-sales method. Management estimates that 3% of net
credit sales will be uncollectible. The balance of the Allowance for Bad Debts after adjustment will be:
A) $7,000.
B) $3,450.
C) $2,850.
D) $3,750.
Answer: D
Explanation: D)
Diff: 2
LO: 9-3
AACSB: Application
20

Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $5,000 of
accounts receivable will be uncollectible. Calculate the Allowance for Bad Debts after the adjustment for
bad debt expense at December 31, 2015.
A) $5,250
B) $6,500
C) $7,000
D) $5,000
Answer: D
Explanation: D)
Diff: 1
LO: 9-3
AACSB: Application
25) Smart Art is a new establishment. During the first year, there were credit sales of $40,000 and
collections of credit sales of $36,000. One account for $650 was written off. The company decided to use
the percent-of-sales method to account for bad debts expense, and decided to use a factor of 2% for their
year-end adjustment of bad debts expense. At the end of the year, what is the ending balance in Accounts
Receivable?
A) $4,000
B) $3,600
C) $3,350
D) $3,200
Answer: C
Explanation: C) Accounts Receivable = $40,000 - $36,000 - $650 = $3,350
Diff: 1
LO: 9-3
AACSB: Application
21
year-end adjustment of bad debts expense. The ending balance in Allowance for Bad Debts account
would be:
A) $150.
B) $800.
C) $250.
D) $1,450.
Answer: A
Explanation: A)
Diff: 2
LO: 9-3
AACSB: Application
year-end adjustment of bad debts expense. At the end of the year, the balance of bad debts expense
would be:
A) $150.
B) $800.
C) $250.
D) $1,450.
Answer: B
Explanation: B) Bad debts expense = ($40,000 × .02) = $800
Diff: 2
LO: 9-3
AACSB: Application
22
the aging-of-receivables method to account for bad debts expense, and estimated $500 as uncollectible at
year end. Therefore, the ending balance in the Allowance for Bad Debts would be:
A) $150.
B) $800.
C) $200.
D) $500.
Answer: D
Diff: 2
LO: 9-3
AACSB: Application
29) A newly created design business called Smart Art is just finishing up its first year of operations.
During the year, there were credit sales of $40,000 and collections of credit sales of $36,000. One account
for $650 was written off. Smart Art uses the aging method to account for uncollectible account expense. It
has estimated $200 as uncollectible at year-end. At the end of the year, what is the ending balance in the
Bad Debts Expense account?
A) $1,150
B) $800
C) $200
D) $850
Answer: D
Explanation: D) Bad Debts Expense = $200 + $650 = $850
Diff: 2
LO: 9-3
AACSB: Application
23
30) At the beginning of 2015, Peter Dots has the following ledger balances:
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000,
and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense
using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance
of Accounts Receivable would be:
A) $40,000.
B) $62,000.
C) $80,000.
D) $18,000.
Answer: B
Explanation: B)
Diff: 2
LO: 9-3
AACSB: Application
24
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000
and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using
the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the
Allowance for Bad Debts would be:
A) $5,000.
B) $6,500.
C) $6,400.
D) $7,000.
Answer: D
Explanation: D)
Diff: 2
LO: 9-3
AACSB: Application
25
the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in Bad
Debts Expense would be:
A) $20,000.
B) $40,000.
C) $28,000.
D) $27,000.
Answer: A
Explanation: A)
Diff: 2
LO: 9-3
AACSB: Application
the aging method. The amount estimated as uncollectible was $25,000. The ending balance in the
Allowance for Bad Debts would be:
A) $38.000.
B) $18,000.
C) $25,000.
D) $30,000.
Answer: C
Diff: 2
LO: 9-3
AACSB: Application
26
the aging method. The amount estimated as uncollectible was $25,000. The ending balance in Bad Debts
Expense would be:
A) $38,000.
B) $25,000.
C) $13,000.
D) $7,000.
Answer: A
Explanation: A)
Calculations: $25,000 + $18,000 - $5,000 = $38,000.

Diff: 3
LO: 9-3
AACSB: Application
35) Accounts receivable has a balance of $30,000 and the Allowance for Bad Debts has a credit balance of
$3,000. The allowance method is used. What is the net realizable value before and after a $2,000 Account
Receivable is written off?
A) $27,000; $27,000
B) $14,300; $14,300
C) $16,000; $15,940
D) $16,000; $16,000
Answer: A
Explanation: A) Before After
write-off write-off
Accounts Receivable $30,000 $28,000
Less: Allowance for Bad Debts -3,000 -1,000
Net Realizable Value $27,000 $27,000
Diff: 2
LO: 9-3
AACSB: Application
27
36) Accounts receivable has a balance of $5,000 and the Allowance for Bad Debts has a credit balance of
$440. The allowance method is used. What is the net realizable value after a $160 account receivable is
written off?
A) $4,400
B) $4,720
C) $4,560
D) $5,000
Answer: C
Explanation: C) After
write-off
Accounts Receivable $4,840
Less: Allowance for Bad Debts 280
Net Realizable Value $4,560
Diff: 1
LO: 9-3
AACSB: Application
37) On January 1st, 2015, Everlight Corp. has the following balances:
During the year, Everlight has $150,000 of credit sales, collections of credit sales of $140,000, and write-
offs of $3,000. It records bad debts expense at the end of the year using the aging-of-receivables method.
At the end of the year, aging analysis produces a figure of $1,900, being the estimate of uncollectible
accounts. Before the year-end entry to adjust the bad debts expense is made, the balance in the Allowance
for Bad Debts expense would be:
A) debit of $1,800.
B) credit of $4,200.
C) zero balance.
D) debit of $3,000.
Answer: A
Explanation: A)
$3,000 - $1,200 = $1,800

Diff: 2
LO: 9-3
AACSB: Application
28
38) A company reports net accounts receivable of $150,000 on its December 31, 2015 balance sheet. The
Allowance for Bad Debts has a credit balance of $15,000. What is the balance in Accounts Receivable?
A) $155,000
B) $150,000
C) $165,000
D) $135,000
Answer: C
Explanation: C) $150,000 + $15,000 = $165,000
Diff: 1
LO: 9-3
AACSB: Application
39) On January 16, Whole Circle sold goods worth $5,000 to Smith on account. It could not collect cash
from the customer, and finally decided to write off the account. Give journal entry to record the write-off
assuming that the company uses the allowance method.
Answer:
Allowance for Bad Debts 5,000
Accounts Receivable—Smith 5,000
Diff: 1
LO: 9-3
AACSB: Application
40) On January 16, 2015, Whole Circle had sold goods worth $5,000 to Smith on account. It could not
collect cash from the customer, and finally decided to write off the account on December 31, 2015.
However, in November 4, 2016, Smith approached the company to make payment, and made payment.
Journalize the transactions on December 31, 2015 and November 4, 2016. (Whole Circle uses the
allowance method.)
Answer: December 31, 2015:
November 4, 2016:
Cash 5,000
Diff: 2
LO: 9-3
AACSB: Application
29
the percent-of-sales method to account for bad debts expense, and use a factor of 2% for their year-end
adjustment of bad debts expense. Prepare the entry to record the bad debt expense.
Answer:
Diff: 1
LO: 9-3
AACSB: Application
the aging method to account for bad debts expense. It has calculated an amount of $200 as their estimate
of uncollectible amounts at year-end. Prepare the journal entry required to record Bad debts expense at
the end of the year.
Answer:
Explanation: Calculations: $200 + $650 = $850

Diff: 2
LO: 9-3
AACSB: Application
debt expense. The company's management estimates that 2% of net credit sales will be uncollectible for
the year 2015. Net credit sales for the year amounted to $250,000. Give journal entry to record the bad
debts expense at December 31, 2015.
Answer:
Bad Debts Expense 5,000
Diff: 1
LO: 9-3
AACSB: Application
30
1) The interest period extends from the original date of the note to the maturity date.
Answer: TRUE
Diff: 1
LO: 9-4
AACSB: Concept
2) The maturity value of a note is the sum of the principal minus interest due at maturity.
Answer: FALSE
Diff: 1
LO: 9-4
AACSB: Concept
3) If the maker of the note fails to repay the borrowed amount on the maturity date, the note is said to be
dishonored.
Answer: TRUE
Diff: 1
LO: 9-4
AACSB: Concept
4) Interest rates are generally stated on a monthly basis.

Answer: FALSE
Diff: 1
LO: 9-4
AACSB: Concept
5) While counting the date of maturity of a note, the date of issue of the note should be omitted.
Answer: TRUE
Diff: 1
LO: 9-4
AACSB: Concept
6) The entity that signs the promissory note and promises to pay the required amount is the:
A) maker of the note.
B) banker of the note.
C) holder of the note.
D) payee of the note.
Answer: A
Diff: 2
LO: 9-4
AACSB: Concept
31
7) The entity to whom the promise of future payment is made for a promissory note is the:
A) maker of the note.
B) endorser of the note.
C) banker of the note.
D) payee of the note.
Answer: D
Diff: 2
LO: 9-4
AACSB: Concept
8) Which of the following exists if the maker of a promissory note fails to pay the note on the due date?
A) a discounted note
B) a depreciated note
C) an amortized note
D) a dishonored note
Answer: D
Diff: 1
LO: 9-4
AACSB: Concept
9) The maturity date for a six-month note issued on January 15 would be:
A) July 15.
B) July 14.
C) July 16.
D) July 10.
Answer: A
Diff: 1
LO: 9-4
AACSB: Concept
10) What is the maturity value of a 3-month, 10% note for $40,000?
A) $42,000
B) $44,000
C) $41,000
D) $40,000
Answer: C
Explanation: C) ($40,000 × 10%) × 3/12 = $1,000
$40,000+ $1,000 = $41,000
Diff: 2
LO: 9-4
AACSB: Application
32
11) A company issues a 60-day, 12% note for $15,000. What is the principal amount of the note?
A) $16,800
B) $15,000
C) $14,700
D) $15,300
Answer: B
Diff: 1
LO: 9-4
AACSB: Concept
12) Calculate the interest on a 90-day, 9% note for $36,000. (Use a 360-day year to compute interest.)
A) $720
B) $810
C) $880
D) $460
Answer: B
Explanation: B) ($36,000 × 9%) × 90/360 = $810
Diff: 2
LO: 9-4
AACSB: Application
13) The maturity value of a note is the:

A) principal amount minus interest due.
B) principal amount plus interest due.
C) face amount of the note.
D) principal amount times the interest rate.
Answer: B
Diff: 1
LO: 9-4
AACSB: Concept
14) On October 1, 2015, Ealys Jewellers accepted a 4-month, 12% note for $6,000 in settlement of an
overdue account receivable. The company closes its accounts at the year end. Calculate and record the
accrued interest on the note at December 31, 2015.
A) $180
B) $160
C) $240
D) $140
Answer: A
Explanation: A) ($6,000 × 12%) × 3/12 = $180
Diff: 2
LO: 9-4
AACSB: Application
33
15) On January 1, Ajax Corp accepted a one-year note for $50,000 at 5% from one of its customers. When
the note matured on December 31, the customer was unable to pay, and the company recorded the
dishonor. The amount of the debit in the dishonor entry would be:
A) $47,500.
B) $2,500.
C) $50,000.
D) $52,500.
Answer: D
Explanation: D) $50,000 × 5% = $2,500
Total amount = $50,000 + $2,500 = $52,500
Diff: 2
LO: 9-4
AACSB: Application
16) Which of the following would be included in the entry by the payee to record a dishonored note
receivable?
A) a debit to Accounts Receivable
B) a debit to Interest Revenue
C) a debit to Notes Receivable
D) a credit to Interest Expense
Answer: A
Diff: 2
LO: 9-4
AACSB: Concept
17) On April 1, 2015, Banne Services has received a 6-month note for $10,000 at 8%. Calculate the amount
of interest receivable on maturity.
A) $320
B) $460
C) $800
D) $400
Answer: D
Explanation: D) ($10,000 × 8%) × 6/12 = $400
Diff: 1
LO: 9-4
AACSB: Application
34
18) On October 1, 2015, Android Inc. made a loan to one of its customers. The customer signed a 4-month
note for $100,000 at 15%. How much interest revenue did the company record in the year 2015?
A) $1,500
B) $1,250
C) $5,000
D) $3,750
Answer: D
Explanation: D) ($100,000 × 15%) × 3/12 = $3,750
Diff: 2
LO: 9-4
AACSB: Application
note for $100,000 at 15%. How much interest revenue did the company record in the year 2016 for this
note?
A) $2,150
B) $3,750
C) $1,250
D) $5,000
Answer: C
Explanation: C) ($100,000 × 15%) × 1/12 = $1,250
Diff: 2
LO: 9-4
AACSB: Application
note for $100,000 at 15%. Calculate the total interest earned on the note.
A) $5,000
B) $3,750
C) $1,250
D) $15,000
Answer: A
Explanation: A) ($100,000 × 15%) × 4/12 = $5,000
Diff: 1
LO: 9-4
AACSB: Application
35
note for $100,000 at 15%. Calculate the maturity value of the note.
A) $105,000
B) $75,000
C) $25,000
D) $95,000
Answer: A
Explanation: A) $100,000 + [($100,000 × 15%) × 4/12] = $105,000
Diff: 2
LO: 9-4
AACSB: Application
22) On December 1, 2015, Parsons Inc. sold machinery to a customer for $20,000. The customer could not
pay at the time of sale, but agreed to pay 9 months later, and signed a 9-month note at 9% interest. How
much interest revenue was earned during the year 2015?
A) $180
B) $150
C) $200
D) $900
Answer: B
Explanation: B) ($20,000 × 9%) × 1/12 =$150
Diff: 2
LO: 9-4
AACSB: Application
much interest revenue was earned during the year 2016?
A) $900
B) $1,800
C) $1,600
D) $1,200
Answer: D
Explanation: D) ($20,000 × 9%) × 8/12 = $1,200
Diff: 2
LO: 9-4
AACSB: Application
36
much interest revenue was earned for the entire term of the note?
A) $1,350
B) $1,200
C) $150
D) $1,800
Answer: A
Explanation: A) ($20,000 × 9%) × 9/12 = $1,350
Diff: 2
LO: 9-4
AACSB: Application
pay at the time of sale, but agreed to pay 9 months later, and signed a 9-month note at 9% interest. What
was the total amount of cash collected by Parsons on the maturity of the note?
A) $21,800
B) $21,350
C) $18,650
D) $21,200
Answer: B
Explanation: B) $20,000 + [(20,000 × 9%) × 9/12] = $21,350
Diff: 2
LO: 9-4
AACSB: Application
26) A six-month note receivable for $4,000 at 12%, dated September 1, 2015, has accrued interest revenue
of ________ on December 31, 2015.
A) $480
B) $240
C) $160
D) $80
Answer: C
Explanation: C) ($4,000 × 12%) × 4/12 = $160
Diff: 2
LO: 9-4
AACSB: Application
37
27) On November 1, 2015, Ealys Jewellers accepted a 3-month, 15% note for $6,000 in settlement of an
overdue account receivable. Give the journal entry to record the accrued interest at the year end.
Answer:
Interest Receivable 150
Interest Revenue 150
Explanation: Calculations: ($6,000 × 15%) × 2/12 = $150

Diff: 2
LO: 9-4
AACSB: Application
28) On October 1, 2015, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of
an overdue account receivable. Interest revenue was accrued through December 31, 2015. Allen receives
the maturity value of the note on the due date. Give journal entry to record the collection of funds.
Answer:
Cash 2,480
Note Receivable 2,400
Interest Receivable 60
Interest Revenue 20
Explanation:
($2,400 × 10%) × 3/12 = $60
($2,400 × 10%) × 1/12 = $20
Diff: 3
LO: 9-4
AACSB: Application
29) On January 1, Ajax Corp accepted a one-year note for $5,000 at 4% from one of its customers. When
the note matured on December 31, the customer was unable to pay, and the company treated it as a
dishonored note. Provide the journal entry for the dishonor of the note in the books of the company.
Answer:
Accounts Receivable 5,200
Notes Receivable 5,000
Interest Revenue 200
Explanation:
Calculations: $5,000 × 4% = $200
Diff: 2
LO: 9-4
AACSB: Application
38
30) On December 1, 2015, Parsons Inc. sold machinery to a customer for $2,000. Parsons regularly sells
machinery. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a
9-month note at 12% interest. Give journal entry to record the revenue at the time of sale. Ignore the entry
for cost of goods sold.
Answer:
Sales Revenue 2,000
Diff: 1
LO: 9-4
AACSB: Application
31) On July 1, 2015, Ealys Jewellers accepted a 3-month, 15% note for $6,000 in settlement of an overdue
account receivable. Provide the journal entry to record the acceptance of the note.
Answer:
Accounts Receivable 6,000
Diff: 2
LO: 9-4
AACSB: Application
32) Give journal entry to record the dishonor of a note receivable at the maturity date.
Answer:
Accounts Receivable
Notes Receivable
Interest Revenue
Diff: 2
LO: 9-4
AACSB: Application
1) The acid-test ratio is also known as the quick ratio.

Answer: TRUE
Diff: 1
LO: 9-5
AACSB: Concept
39
2) The higher the quick ratio, the lower the business's ability to pay its current liabilities.
Answer: FALSE
Diff: 1
LO: 9-5
AACSB: Concept
3) The amount of Accounts Receivable is generally reported at its gross amount on the balance sheet.
Answer: FALSE
Diff: 1
LO: 9-5
AACSB: Concept
4) The acid-test ratio is a more stringent measure of liquidity than the cash ratio.
Answer: FALSE
Diff: 1
LO: 9-5
AACSB: Concept
5) Days' sales in receivables is also known as the collection period.

Answer: TRUE
Diff: 1
LO: 9-5
AACSB: Concept
6) An acid-test ratio of 1.0 is considered safer than a ratio of 0.50.

Answer: TRUE
Diff: 1
LO: 9-5
AACSB: Concept
7) The days' sales in receivables ratio indicates the number of days it takes to collect the average level of
accounts receivable.
Answer: TRUE
Diff: 1
LO: 9-5
AACSB: Concept
40
8) The accounts receivable turnover ratio indicates whether a company could pay all its current liabilities
if they were become due immediately.
Answer: FALSE
Diff: 1
LO: 9-5
AACSB: Concept
9) The number of times a company collects the average accounts receivable balance in a year is known as
the accounts receivable turnover ratio.
Answer: TRUE
Diff: 1
LO: 9-5
AACSB: Concept
10) Barker Sales has a days' sales in receivables figure of 35 and Xanadu Company has a days' sales in
receivables of 25. This would suggest that Xanadu is having greater difficulty collecting their accounts
receivable than Barker.
Answer: FALSE
Diff: 3
LO: 9-5
AACSB: Application
11) The accounts receivable turnover ratio of a merchandiser is 9.8 times. Calculate the days' sales in
receivables for the merchandiser. (Round to the nearest day.)
A) 33 days
B) 37 days
C) 28 days
D) 40 days
Answer: B
Explanation: B) Days' sales in receivables = 365/9.8 = 37 days (rounded)
Diff: 2
LO: 9-5
AACSB: Application
41
12) Which of the following is true of the proper balance sheet treatment of the Allowance for Bad Debts
with a credit balance?
A) It is reported as a current liability.
B) It is reported as an operating expense.
C) It is reported as a separate, independent line item under current assets.
D) It is shown as a contra account related to accounts receivable.
Answer: D
Diff: 1
LO: 9-5
AACSB: Application
13) A company has net credit sales of $95,000, beginning net accounts receivable of $20,000 and ending
net accounts receivable of $18,000. Calculate the days' sales in receivables.
A) 60 days
B) 48 days
C) 58 days
D) 73 days
Answer: D
Explanation: D) Accounts Receivable Turnover Ratio = [$95,000/(($20,000 + $18,000)/2)] = 5
Days' sales in receivables = 365/5 = 73 days
Diff: 2
LO: 9-5
AACSB: Application
14) Which of the following is included in the numerator of the acid-test ratio?
A) Cash including cash equivalents, inventory, short-term investments, net current receivables
B) Accounts receivable and inventory
C) Cash including cash equivalents, short-term investments, net current receivables
D) Total current assets
Answer: C
Diff: 2
LO: 9-5
AACSB: Concept
15) Which of the following is included in the denominator of the acid-test ratio?
A) Current liabilities less accounts payable
B) Total liabilities
C) Total current liabilities
D) Total current assets
Answer: C
Diff: 2
LO: 9-5
AACSB: Concept
42
16) From the following details, calculate the acid-test ratio. (Round to two decimal places.)
Cash $120,000
Short-term investments 150,000
Net current receivables 280,000
Inventory 290,000
Total current liabilities 790,000
A) 0.91
B) 0.94
C) 1.06
D) 0.70
Answer: D
Explanation: D) Acid-test ratio = ($120,000 + $150,000 + $280,000)/$790,000 = 0.7 (rounded)
Diff: 2
LO: 9-5
AACSB: Application
17) What is the acid-test ratio for a merchandiser having the following balances? (Round to two decimal
places.)
Cash $20,000
Short-term investments 40,000
Net current receivables 50,000
Merchandise Inventory 90,000
Total current liabilities 275,000
A) 0.93
B) 0.40
C) 0.64
D) 1.76
Answer: B
Explanation: B) Acid-test ratio = ($20,000 + $40,000 + $50,000)/$275,000 = 0.40
Diff: 2
LO: 9-5
AACSB: Application
43
18) Which of the following describes the key significance of the acid-test ratio?
A) It measures a company's ability to pay its current liabilities if they are due immediately.
B) It measures the ability of the company to earn profits out of the sales made by it.
C) It reflects how much long-term debt a company has.
D) It indicates how much cash could be realized by selling the inventory.
Answer: A
Diff: 2
LO: 9-5
AACSB: Concept
19) Which of the following is true of days' sales in receivables?

A) It measures how many days it takes to order and receive inventory.
B) It measures how many days it takes to collect the average level of accounts receivable.
C) It measures how many days it takes to sell inventory.
D) It measures how slowly the inventory is depreciated.
Answer: B
Diff: 1
LO: 9-5
AACSB: Concept
20) A company has net credit sales of $1,012,500, beginning net accounts receivable of $250,000 and
ending net accounts receivable of $200,000. What is the days' sales in accounts receivable? (Round to
nearest whole day.)
A) 81 days
B) 99 days
C) 93 days
D) 90 days
Answer: A
Explanation: A) Accounts receivable turnover ratio = [$1,012,500/(($250,000 + $200,000)/2)] = 4.5
Days' sales in receivables = 365/4.5 = 81.11 = 81 days (rounded)
Diff: 2
LO: 9-5
AACSB: Application
21) The accounts receivable turnover ratio measures:

A) how well a company can pay its current liabilities with its current assets.
B) how many days it takes, on average, to collect receivables.
C) how many days it takes, on average, to sell the inventory.
D) the times a company collects accounts receivable in a year.
Answer: D
Diff: 1
LO: 9-5
AACSB: Concept
44
22) Martin Sales provides the following information:
Net credit sales: $750,000
Beginning net accounts receivable: $40,000
Ending net accounts receivable: $20,000
Calculate the accounts receivable turnover ratio. (Round to the nearest whole number.)
A) 24 times
B) 25 times
C) 27 times
D) 22 times
Answer: B
Explanation: B) Accounts receivable turnover ratio = [$750,000/(($40,000 + $20,000)/2)] = 25 times
Diff: 2
LO: 9-5
AACSB: Application
45
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CHAPTER XI
DOSTOIEVSKY’S ANNIVERSARY
St. Petersburg, February 24th.
They are celebrating the 25th anniversary of the death of

Dostoievski, and this fact has brought back to my mind, with great
vividness, a conversation I had with the officers of the battery at Jen-
tzen-tung last September, and which I have already noted in my
diary.
We were sitting in the ante-room of the small Chinese house which
formed our quarters. This ante-room, which had paper windows and
no doors, a floor of mud, and a table composed of boards laid upon
two small tressels, formed our dining-room. We had just finished
dinner, and were drinking tea out of pewter cups. Across the
courtyard from the part of the dwelling where the Chinese herded
together, we could hear the monotonous song of a Chinaman or a
Mongol singing over and over to himself the same strophe, which
rose by the intervals of a scale more subtle than ours and sank again
to die away in the vibrations of one prolonged note, to the
accompaniment of a single-stringed instrument.
The conversation had languished. Somebody was absorbed in a
patience, we were talking of books and novels in a vague, desultory
fashion, when suddenly Hliebnikov, a young Cossack officer, said:
“Who is the greatest writer in the world?” Vague answers were made
as to the comparative merits of Homer, Dante, Shakespeare, and
Molière, but Hliebnikov impatiently waived all this talk aside. Then
turning to me he said: “He knows; there is one writer greater than all
of them, and that is Dostoievski.”
“Dostoievski!” said the doctor. “Dostoievski’s work is like a clinical
laboratory or a dissecting-room. There is no sore spot in the human
soul into which he does not poke his dirty finger. His characters are
either mad or abnormal. His books are those of a madman, and can
only be appreciated by people who are half mad themselves.”
The young Cossack officer did not bother to discuss the question.
He went out into the night in disgust. We continued the argument for
a short time. “There is not a single character,” said the doctor, “in all
Dostoievski’s books who is normal.” The doctor was a cultivated
man, and seeing that we differed we agreed to differ, and we talked
of other things, but I was left wondering why Hliebnikov was so
convinced that Dostoievski was the greatest of all writers, and why he
knew I should agree with him. I have been thinking this over ever
since, and in a sense I do agree with Hliebnikov. I think that
Dostoievski is the greatest writer that has ever lived, if by a great
writer is meant a man whose work, message, or whatever you like to
call it, can do the greatest good, can afford the greatest consolation to
poor humanity. If we mean by the greatest writer the greatest artist,
the most powerful magician, who can bid us soar like Shelley or
Schubert into the seventh heaven of melody, or submerge us like
Wagner beneath heavy seas until we drown with pleasure, or touch
and set all the fibres of our associations and our æsthetic
appreciation vibrating with incommunicable rapture by the magic of
wonderful phrases like Virgil or Keats, or strike into our very heart
with a divine sword like Sappho, Catullus, Heine, or Burns, or ravish
us by the blend of pathos and nobility of purpose with faultless
diction like Leopardi, Gray, and Racine, or bid us understand and
feel the whole burden of mankind in a thin thread of notes like
Beethoven or in a few simple words like Goethe, or evoke for us the
whole pageant of life like Shakespeare to the sound of Renaissance
flutes, or all Heaven and Hell like Dante, by “thoughts that breathe
and words that burn”?
If we are thinking of all these miraculous achievements when we
say a great writer or the greatest writer, then we must not name
Dostoievski. Dostoievski is not of these; in his own province, that of
the novelist, he is as a mere workman, a mere craftsman, one of the
worst, inferior to any French or English ephemeral writer of the day
you like to mention; but, on the other hand, if we mean by a great
writer a man who has given to mankind an inestimable boon, a
priceless gift, a consolation, a help to life, which nothing can equal or
replace, then Dostoievski is a great writer, and perhaps the greatest
writer that has ever lived. I mean that if the Holy Scriptures were
destroyed and no trace were left of them in the world, the books
where mankind, bereft of its Divine and inestimable treasure, would
find the nearest approach to the supreme message of comfort would
be the books of Dostoievski.
Dostoievski is not an artist; his stories and his books are put
together and shaped anyhow. The surroundings and the
circumstances in which he places his characters are fantastic and
impossible to the verge of absurdity. The characters themselves are
also often impossible and fantastic to the verge of absurdity; yet they
are vivid in a way no other characters are vivid, and alive, not only so
that we perceive and recognise their outward appearance, but so that
we know the innermost corners of their souls. His characters, it is
said, are abnormal. One of his principal figures is a murderer who
kills an old woman from ambition to be like Napoleon, and put
himself above the law; another is a victim to epileptic fits. But the
fact should be borne in mind that absolutely normal people, like
absolutely happy nations, have no history; that since the whole of
humanity is suffering and groaning beneath the same burden of life,
the people who in literature are the most important to mankind are
not the most normal, but those who are made of the most complex
machinery and of the most receptive wax, and who are thus able to
receive and to record the deepest and most varied impressions. And
in the same way as Job and David are more important to humanity
than George I. or Louis-Philippe, so are Hamlet and Falstaff more
important than Tom Jones and Mr. Bultitude. And the reason of this
is not because Hamlet and Falstaff are abnormal—although
compared with Tom Jones they are abnormal—but because they are
human: more profoundly human, and more widely human. Hamlet
has been read, played, and understood by succeeding generations in
various countries and tongues, in innumerable different and
contradictory fashions; but in each country, at each period, and in
each tongue, he has been understood by his readers or his audience,
according to their lights, because in him they have seen a reflection
of themselves, because in themselves they have found an echo of
Hamlet. The fact that audiences, actors, readers, and commentators
have all interpreted Hamlet in utterly contradictory ways testifies not
merely to the profound humanity of the character but to its
multiplicity and manysidedness. Every human being recognises in
himself something of Hamlet and something of Falstaff; but every
human being does not necessarily recognise in himself something of
Tom Jones or Mr. Bultitude. At least what in these characters
resembles him is so like himself that he cannot notice the likeness; it
consists in the broad elementary facts of being a human being; but
when he hears Hamlet or Falstaff philosophising or making jokes on
the riddle of life he is suddenly made conscious that he has gone
through the same process himself in the same way.
So it is with Dostoievski. Dostoievski’s characters are mostly
abnormal, but it is in their very abnormality that we recognise their
profound and poignant humanity and a thousand human traits that
we ourselves share. And in showing us humanity at its acutest, at its
intensest pitch of suffering, at the soul’s lowest depth of degradation,
or highest summit of aspiration, he makes us feel his comprehension,
pity, and love for everything that is in us, so that we feel that there is
nothing which we could think or experience; no sensation, no hope,
no ambition, no despair, no disappointment, no regret, no greatness,
no meanness that he would not understand; no wound, no sore for
which he would not have just the very balm and medicine which we
need. Pity and love are the chief elements of the work of Dostoievski
—pity such as King Lear felt on the heath; and just as the terrible
circumstances in which King Lear raves and wanders make his pity
all the greater and the more poignant in its pathos, so do the
fantastic, nightmarish circumstances in which Dostoievski’s
characters live make their humanness more poignant, their love
more lovable, their pity more piteous.
A great writer should see “life steadily and see life whole.”
Dostoievski does not see the whole of life steadily, like Tolstoi, for
instance, but he sees the soul of man whole, and perhaps he sees
more deeply into it than any other writer has done. He shrinks from
nothing. He sees the “soul of goodness in things evil”: not exclusively
the evil, like Zola; nor does he evade the evil like many of our writers.
He sees and pities it. And this is why his work is great. He writes
about the saddest things that can happen; the most melancholy, the
most hopeless, the most terrible things in the world; but his books do
not leave us with a feeling of despair; on the contrary, his own “sweet
reasonableness,” the pity and love with which they are filled are like
balm. We are left with a belief in some great inscrutable goodness,
and his books act upon us as once his conversation did on a fellow
prisoner whom he met on the way to Siberia. The man was on the
verge of suicide; but after Dostoievski had talked to him for an hour
—we may be sure there was no sermonising in that talk—he felt able
to go on, to live even with perpetual penal servitude before him. To
some people, Dostoievski’s books act in just this way, and it is,
therefore, not odd that they think him the greatest of all writers.
CHAPTER XII
THE POLITICAL PARTIES
Moscow, March 11th.
The political parties which are now crystallising themselves are the
result of the Liberal movement which began in the twenties, and
proceeded steadily until the beginning of the war in 1904, when the
Liberal leaders resolved, for patriotic reasons, to mark time and wait.
This cessation of hostilities did not last long, and the disasters caused
by the war produced so universal a feeling of discontent that the
liberation movement was automatically set in motion once more.
On the 19th of June, 1905, a deputation of the United Zemstva, at
the head of which was Prince S. N. Troubetzkoi, was received by the
Emperor. Prince Troubetzkoi, in a historic speech, expressed with
the utmost frankness and directness the imperative need of sweeping
reform and of the introduction of national representation. The
coalition of the Zemstva formed the first political Russian party, but
it was not until after the great strike, and the granting of the
Manifesto in October, that parties of different shades came into
existence and took definite shape. During the month which followed
the Manifesto the process of crystallisation of parties began, and is
still continuing, and they can now roughly be divided into three
categories—Right, Centre, and Left, the Right being the extreme
Conservatives, the Centre the Constitutional Monarchists, and the
Left consisting of two wings, the Constitutional Democrats on the
right and the Social Democrats and Social Revolutionaries on the
left. Of these the most important is the party of the Constitutional
Democrats, nicknamed the “Cadets.” “Cadets” means “K.D.,” the
word “Constitutional” being spelt with a “K” in Russian, and as the
letter “K” in the Russian alphabet has the same sound as it has in
French, the result is a word which sounds exactly like the French
word “Cadet.” Similarly, Social Revolutionaries are nicknamed
“S.R.’s” and the Social Democrats “S.D.’s.”
In order to understand the origin of the Constitutional Democrats
one must understand the part played by the Zemstva. In 1876 a
group of County Councillors, or Zemstvoists, under the leadership of
M. Petrunkevitch devoted themselves to the task of introducing
reforms in the economical condition of Russia. In 1894 their
representatives, headed by M. Rodichev, were summarily sent about
their business, after putting forward a few moderate demands. In
1902 these men formed with others a “League of Liberation.” M.
Schipov tried to unite these various “Zemstva” in a common
organisation, and some of the members of the Liberation League,
while co-operating with them, started a separate organisation called
the Zemstvo Constitutionalists. Among the members of this group
were names which are well known in Russia, such as Prince
Dolgoroukov, MM. Stachovitch, Kokoshkin, and Lvov. But these
“Zemstvoists” formed only a small group; what they needed, in order
to represent thinking Russia, was to be united with the professional
classes. In November, 1904, the various professions began to group
themselves together in political bodies. Various political unions were
formed, such as those of the engineers, doctors, lawyers, and
schoolmasters. Then Professor Milioukov, one of the leading
pioneers of the Liberal movement, whose name is well known in
Europe and America, united all professional unions into a great
“Union of Unions,” which represented the great mass of educated
Russia. Before the great strike in October, 1905, he created, together
with the best of his colleagues, a new political party, which united the
mass of professional opinion with the small group of Zemstvo
leaders. He had recognised the fact that the Zemstvoists were the
only men who had any political experience, and that they could do
nothing without enrolling the professional class. Therefore it is
owing to Professor Milioukov that the experienced Zemstvo leaders
in October had the whole rank and file of the middle class behind
them, and the Constitutional Democrats, as they are at present,
represent practically the whole “Intelligenzia,” or professional class,
of Russia. This party is the only one which is seriously and practically
organised. This being so, it is the most important of the political
parties.
Those of the Right have not enough followers to give them
importance, and those of the Left have announced their intention of
boycotting the elections. These various parties are now preparing for
the elections.
We are experiencing now the suspense of an entr’acte before the
curtain rises once more on the next act of the revolutionary drama.
This will probably occur when the Duma meets in April. People of all
parties seem to be agreed as to one thing, that the present state of
things cannot last. There is at present a reaction against reaction.
After the disorders here in December many people were driven to the
Right; now the reactionary conduct of the Government has driven
them back to the Left.
So many people have been arrested lately that there is no longer
room for them in prison. An influential political leader said to me
yesterday that a proof of the incompetence of the police was that they
had not foreseen the armed rising in December, whereas every one
else had foreseen it. “And now,” he said, “they have been, so to speak,
let loose on the paths of repression; old papers and old cases,
sometimes of forty years ago, are raked up, and people are arrested
for no reason except that the old machine, which is broken and
thoroughly out of order, has been set working with renewed energy.”
The following conversation is related to me—if it is not true (and I
am convinced that it is not true) it is typical—as having taken place
between a Minister and his subordinate:—
The Subordinate: There are so many people in prison that there is
no possibility of getting in another man. The prisons are packed, yet
arrests are still being made. What are we to do? Where are these
people to be put?
The Minister: We must let some of the prisoners out.
The Subordinate: How many?
The Minister: Say five thousand.
The Subordinate: Why five thousand?
The Minister: A nice even number.
The Subordinate: But how? Which? How shall we choose them?
The Minister: Let out any five thousand. What does it matter to
them? Any five thousand will be as pleased as any other to be let out.
It is interesting to note that last November the Minister of the
Interior was reported to have said that if he could be given a free
hand to arrest twenty thousand “intellectuals,” he would stop the
revolution. The twenty thousand have been arrested, but the
revolution has not been stopped.
So far, in spite of the many manifestoes, no guarantee of a
Constitution has been granted. The Emperor has, it is true, declared
that he will fulfil the promises made in his declaration of the 17th of
October, and it is true that if these promises were fulfilled, the result
would be Constitutional Government. But at the same time he
declared that his absolute power remained intact. At first sight this
appears to be a contradiction in terms; but, as the Power which
granted the Manifesto of October 17th was autocratic and unlimited,
and as it made no mention of the future limiting of itself, it is now, as
a matter of fact, not proceeding contrarily to any of its promises. The
liberties which were promised may only have been meant to be
temporary. They could be withdrawn at any moment, since the
Emperor’s autocratic power remained. The Manifesto might only
have been a sign of goodwill of the Emperor towards his people. It
promised certain things, but gave no guarantee as to the fulfilment of
these promises. The whole of Russia, it is true, understood it
otherwise. The whole of Russia understood when this Manifesto was
published that a Constitution had been promised, and that autocracy
was in future to be limited. What Count Witte understood by it, it is
difficult to say. Whether he foresaw or not that this Manifesto by its
vagueness would one day mean much less than it did then, or
whether he only realised this at the same time that he realised that
the Conservative element was much stronger than it was thought to
be, it is impossible to determine. The fact remains that the Emperor
has not withdrawn anything; he has merely not done what he never
said he would do, namely, voluntarily abdicate his autocratic power.
The Conservatives are opposed to any such proceeding; not in the
same way as the extreme reactionaries, some of whom relegated the
portrait of the Emperor to the scullery on the day of the Manifesto
from sheer Conservative principle, but because they say that if the
autocratic power is destroyed the peasant population will be
convulsed, and the danger will be immense. To this Liberals—all
liberal-minded men, not revolutionaries—reply that this supposed
danger is a delusion of the Conservatives, who have unconsciously
invented the fact to support their theory and have not based their
theory on the fact; that many peasants clearly understand and
recognise that there is to be a constitutional régime in Russia; that if
this danger does exist, the risk incurred by it must be taken; that in
any case it is the lesser of two evils, less dangerous than the
maintenance of the autocracy.
Count Witte’s opponents on the Liberal side say that the course of
events up to this moment has been deliberately brought about by
Count Witte; that he disbelieved and disbelieves in Constitutional
Government for Russia; that he provoked disorder in order to crush
the revolutionary element; that the Moderate parties played into his
hands by not meeting him with a united front; that, Duma or no
Duma, he intends everything to remain as before and the power to be
in his hands. What his supporters say I do not know, because I have
never seen one in the flesh, but I have seen many people who say that
what has happened so far has been brought about with infinite skill
and knowledge of the elements with which he had to deal. Further,
they add that Count Witte has no principles and no convictions; that
he has always accommodated himself to the situation of the moment,
and worked in harmony with the men of the moment, whatever they
were; that he has no belief in the force or the stability of any
movement in Russia; that he trusts the Russian character to simmer
down after it has violently fizzed; that he intends to outstay the
fizzing period; that he has a great advantage in the attitude of the
Moderate parties, who, although they do not trust him, play into his
hands by disagreeing on small points and not meeting him with clear
and definite opposition. They add, however, that he has
miscalculated and wrongly gauged the situation this time, because
the simmering down period will only be temporary and the fizzing
will be renewed again with increasing violence, until either the cork
flies into space or the bottle is burst. The cork is autocracy, the bottle
Russia, and the mineral water the revolution. The corkscrew was the
promise of a Constitution with which the cork was partially loosened,
only to be screwed down again by Count Witte’s powerful hand.
Among all the parties the most logical seem to be the Extreme
Conservatives and the Extreme Radicals. The Extreme Conservatives
have said all along that the talk of a Constitution was nonsensical,
and the Manifesto of October 17th a great betrayal; that the only
result of it has been disorder, riot, and bloodshed. They are firmly
based on a principle. The Extreme Radicals are equally firmly based
on a principle, namely, that the autocratic régime must be done away
with at all costs, and that until it is swept away and a Constitution
based on universal suffrage takes its place there is no hope for
Russia. Therefore the danger that the Moderate parties may
eventually be submerged and the two extremes be left face to face,
still exists. As a great quantity of the Radicals are in prison they are
for the time being less perceptible; but this era of repression cannot
last, and it has already created a reaction against itself. But then the
question arises, what will happen when it stops? What will happen
when the valve on which the police have been sitting is released?
The influential political leader with whom I dined last night, and
who is one of the leading members of the party of October 17th, said
that there was not a man in Russia who believed in Witte, that Witte
was a man who had no convictions. I asked why he himself and other
Zemstvo leaders had refused to take part in the administration
directly after the Manifesto had been issued, when posts in the
Cabinet were offered to them. He said their terms had been that the
Cabinet should be exclusively formed of Liberal leaders; but they did
not choose to serve in company with a man like Durnovo, with whom
he would refuse to shake hands.
He added that it would not have bettered their position in the
country with regard to the coming Duma, which he was convinced
would be Liberal. Talking of the Constitutional Democrats he said
they were really republicans but did not dare own it.
CHAPTER XIII
IN THE COUNTRY
Sosnofka, Government of Tambov,

March 25th.
When one has seen a thing which had hitherto been vaguely familiar
suddenly illuminated by a flood of light, making it real, living, and
vivid, it is difficult to recall one’s old state of mind before the inrush
of the illuminating flood; and still more difficult to discuss that thing
with people who have not had the opportunity of illumination. The
experience is similar to that which a child feels when, after having
worshipped a certain writer of novels or tales, and wondered why he
was not acknowledged by the whole world to be the greatest author
that has ever been, he grows up, and by reading other books, sees the
old favourite in a new light, the light of fresh horizons opened by
great masterpieces; in this new light the old favourite seems to be a
sorry enough impostor, his golden glamour has faded to tinsel. The
grown-up child will now with difficulty try to discover what was the
cause and secret of his old infatuation, and every now and then he
will receive a shock on hearing some fellow grown-up person talk of
the former idol in the same terms as he would have talked of him
when a child, the reason being that this second person has never got
farther; has never reached the illuminating light of new horizons. So
it is with many things; and so it is in my case with Russia. I find it
extremely difficult to recall exactly what I thought Russia was before
I had been there; and I find Russia difficult to describe to those who
have never been there. There is so much when one has been there
that becomes so soon a matter of course that it no longer strikes one,
but which to the newcomer is probably striking.
The first time I came to Russia I travelled straight to the small
village where I am now staying. What did I imagine Russia to be like?
All I can think of now is that there was a big blank in my mind. I had
read translations of Russian books, but they had left no definite
picture or landscape in my mind; I had read some books about
Russia and got from them very definite pictures of a fantastic
country, which proved to be curiously unlike Russia in every respect.
A country where feudal castles, Pevenseys and Hurstmonceuxs,
loomed in a kind of Rhine-land covered with snow, inhabited by
mute, inglorious Bismarcks, and Princesses who carried about
dynamite in their cigarette-cases and wore bombs in their tiaras;
Princesses who owed much of their being to Ouida, and some of it to
Sardou.
Then everything in these books was so gloriously managed;
everybody was so efficient, so powerful; the Bismarcks so
Machiavellian and so mighty; the Princesses so splendide mendaces.
The background was also gorgeous, barbaric, crowded with Tartars
and Circassians, blazing with scimitars, pennons, armour, and
sequins, like a scene in a Drury Lane pantomime; and every now and
then a fugitive household would gallop in the snow through a
primæval forest, throwing their children to the wolves, so as to
escape being devoured themselves. This, I think, was the impression
of Russia which I derived before I went there from reading French
and English fiction about Russia, from Jules Verne’s “Michel
Strogoff,” and from memories of many melodramas. Then came the
impressions received from reading Russian books, which were again
totally different from this melodramatic atmosphere.
From Russian novels I derived a clear idea of certain types of men
who drank tea out of a samovar and drove forty versts in a vehicle
called a Tarantass. I made the acquaintance of all kinds of people,
who were as real to me as living acquaintances; of Natascha and
Levine, and Pierre and Anna Karenine, and Basaroff, and Dolly, and
many others. But I never saw their setting clearly, I never realised
their background, and I used to see them move before a French or
German background. Then I saw the real thing, and it was utterly
and totally different from my imaginations and my expectations. But
now when I try to give the slightest sketch of what the country is
really like the old difficulty presents itself; the difficulty which arises
from talking of a thing of which one has a clear idea to people who
have a vague and probably false idea of the reality. The first thing one
can safely say is this: eliminate all notions of castles, Rhine country,
feudal keeps, and stone houses in general. Think of an endless plain,
a sheet of dazzling snow in winter, an ocean of golden corn in
summer, a tract of brown earth in autumn, and now in the earliest
days of spring an expanse of white melting snow, with great patches
of brown earth and sometimes green grass appearing at intervals,
and further patches of half-melted snow of a steely-grey colour,
sometimes blue as they catch the reflection of the dazzling sky in the
sunlight. In the distance on one side the plain stretches to infinity, on
the other you may see the delicate shapes of a brown, leafless wood,
the outlines soft in the haze. If I had to describe Russia in three
words I should say a plain, a windmill, and a church. The church is
made of wood, and is built in Byzantine style, with a small cupola
and a minaret. It is painted red and white, or white and pale-green.
Sometimes the cupola is gilt.
The plain is dotted with villages, and one village is very like
another. They consist generally of two rows of houses, forming what
does duty for a street, but the word street would be as misleading as
possible in this case. It would be more exact to say an exceedingly
broad expanse of earth: dusty in summer, and in spring and autumn
a swamp of deep soaking black mud. The houses, at irregular
intervals, sometimes huddled close together, sometimes with wide
gaps between them, succeed each other (the gaps probably caused by
the fact that the houses which were there have been burnt). They are
made of logs, thatched with straw; sometimes (but rarely) they are
made of bricks and roofed with iron. As a rule they look as if they had
been built by Robinson Crusoe. The road is strewn with straw and
rich in abundance of every kind of mess. Every now and then there is
a well of the primitive kind which we see on the banks of the Nile,
and which one imagines to be of the same pattern as those from
which the people in the Old Testament drew their water. The roads
are generally peopled with peasants driving at a leisurely walk in
winter in big wooden sledges and in summer in big wooden carts.
Often the cart is going on by itself with somebody in the extreme
distance every now and then grunting at the horse. A plain, a village,
a church, every now and then a wood of birch-trees, every now and
then a stream, a weir, and a broken-down lock. A great deal of dirt, a
great deal of moisture. An overwhelming feeling of space and
leisureliness, a sense that nothing you could say or do could possibly
hurry anybody or anything, or make the lazy, creaking wheels of life
go faster—that is, I think, the picture which arises first in my mind
when I think of the Russian country.
Then as to the people. With regard to these, there is one fact of
capital importance which must be borne in mind. The people if you
know the language and if you don’t are two separate things. The first
time I went to Russia I did not know a word of the language, and,
though certain facts were obvious with regard to the people, I found
it a vastly different thing when I could talk to them myself. So
different that I am persuaded that those who wish to study this
country and do not know the language are wasting their time, and
might with greater profit study the suburbs of London or the Isle of
Man. And here again a fresh difficulty arises. All the amusing things
one hears said in this country, all that is characteristic and smells of
the Russian land, all that is peculiarly Russian, is like everything
which is peculiarly anything, peculiarly English, Irish, Italian, or
Turkish, untranslatable, and loses all its savour and point in
translation. This is especially true with regard to the Russian
language, which is rich in peculiar phrases and locutions,
diminutives, and terms which range over a whole scale of delicate
shades of endearment and familiarity, such as “little pigeon,” “little
father,” &c., and these phrases translated into any other language
lose all their meaning. However, the main impression I received
when I first came to Russia, and the impression which I received
from the Russian soldiers with whom I mingled in Manchuria in the
war, the impression which is now the strongest with regard to them
is that of humaneness. Those who read in the newspapers of acts of
brutality and ferocity, of houses set on fire and pillaged, of huge
massacres of Jews, of ruthless executions and arbitrary
imprisonments, will rub their eyes perhaps and think that I must be
insane. It is true, nevertheless. A country which is in a state of
revolution is no more in its normal condition than a man when he is
intoxicated. If a man is soaked in alcohol and then murders his wife
and children and sets his house on fire, it does not necessarily prove
that he is not a humane member of society. He may be as gentle as a
dormouse and as timid as a hare by nature. His excitement and
demented behaviour are merely artificial. It seems to me now that
the whole of Russia at this moment is like an intoxicated man; a man
inebriated after starvation, and passing from fits of frenzy to sullen
stupor. The truth of this has been illustrated by things which have
lately occurred in the country. Peasants who have looted the spirit
stores and destroyed every house within reach have repented with
tears on the next day.
The peasants have an infinite capacity for pity and remorse, and
therefore the more violent their outbreaks of fury the more bitter is
their remorse. A peasant has been known to worry himself almost to
death, as if he had committed a terrible crime, because he had
smoked a cigarette before receiving the Blessed Sacrament. If they
can feel acute remorse for such things, much more acute will it be if
they set houses on fire or commit similar outrages. If you talk to a
peasant for two minutes you will notice that he has a fervent belief in
a great, good, and inscrutable Providence. He never accuses man of
the calamities to which flesh is heir. When the railway strike was at
its height, and we were held up at a small side station, the train
attendant repeated all day long that God had sent us a severe trial,
which He had. Yesterday I had a talk with a man who had returned
from the war; he had been a soldier and a surgeon’s assistant, and
had received the Cross of St. George for rescuing a wounded officer
under fire. I asked him if he had been wounded. He said, “No, my
clothes were not even touched; men all around me were wounded.
This was the ordinance of God. God had pity on the orphan’s tears. It
was all prearranged thus that I was to come home. So it was to be.” I
also had tea with a stonemason yesterday who said to me, “I and my
whole family have prayed for you in your absence because these are
times of trouble, and we did not know what bitter cup you might not
have to drink.” Then he gave me three new-laid eggs with which to
eat his very good health.
March 29th.
To-day I went out riding through the leafless woods and I saw one
of the most beautiful sights I have ever seen, a sight peculiarly
characteristic of Russian landscape. We passed a small river that up
to now has been frozen, but the thaw has come and with it the floods
of spring. The whole valley as seen from the higher slopes of the
woods was a sheet of shining water. Beyond it in the distance was a
line of dark-brown woods. The water was grey, with gleaming layers
in it reflecting the white clouds and the blue sky; and on it the bare
trees seemed to float and rise like delicate ghosts, casting clearly
defined brown reflections. The whole place had a look of magic and
enchantment about it, as if out of the elements of the winter, out of
the snow and the ice and the leafless boughs, the spring had devised
and evoked a silvery pageant to celebrate its resurrection.
Moscow, April 6th.
I have spent twelve instructive days in the country; instructive,

because I was able to obtain some first-hand glimpses into the state
of the country, into the actual frame of mind of the peasants; and the
peasants are the obscure and hidden factor which will ultimately
decide the fate of Russian political life. It is difficult to get at the
peasants; it is exceedingly difficult to get them to speak their mind.
You can do so by travelling with them in a third-class carriage,
because then they seem to regard one as a fleeting shadow of no
significance which will soon vanish into space. However, I saw
peasants; I heard them discuss the land question and the manner in
which they proposed to buy their landlords’ property. I also had
some interesting talks with a man who had lived among the peasants
for years. From him and from others I gathered that their attitude at
present was chiefly one of expectation. They are waiting to see how
things turn out. They were continually asking my chief informant
whether anything would come of the “levelling” (Ravnienie); this is,
it appears, what they call the revolutionary movement. It is
extremely significant that they look upon this as a process of
equalisation. The land question in Russia is hopelessly complicated;
it is about ten times as complicated as the land question in Ireland,
and of the same nature. I had glimpses of this complexity. The village
where I was staying was divided into four “societies”; each of these
societies was willing to purchase so much land, but when the matter
was definitely settled with regard to one society two representatives
of two-thirds of that society appeared and stated that they were “Old
Souls” (i.e., they had since the abolition of serfage a separate
arrangement), and wished to purchase the lands separately in order
to avoid its partition; upon which the representatives of the whole
society said that this was impossible, and that they were the
majority. The “Old Souls” retorted finally that a general meeting
should be held, and then it would be seen that the majority was in
favour of them. They were in a minority; and in spite of the
speciousness of their arguments it was difficult to see how the
majority, whose interests were contrary to those of the “Old Souls,”
could be persuaded to support them. This is only one instance out of
many.
Another element of complication is that the peasants who can earn
their living by working on the landlords’ land are naturally greatly
averse from anything like a complete sale of it, and are alarmed by
the possibility of such an idea. Also there is a class of peasants who
work in factories, and therefore are only interested in the land
inasmuch as profit can be derived from it while it belongs to the
landlord. Again, there are others who are without land, who need
land, and who are too poor to buy it. If all the land were given to
them as a present to-morrow the result in the long run would be
deplorable, because the quality of the land—once you eliminate the
landlord and his more advanced methods—would gradually
deteriorate and poverty would merely be spread over a larger area.
One fact is obvious: that many of the peasants have not got enough
land, and to them land is now being sold by a great number of
landlords. To settle the matter further, a radical scheme of agrarian
reform is necessary; many such schemes are being elaborated at this
moment, but those which have seen the light up to the present have
so far proved a source of universal disagreement. The fact which lies
at the root of the matter is of course that if the land question is to be
solved the peasant must be educated to adopt fresher methods of
agriculture than those which were employed in the Garden of Eden;
methods which were doubtless excellent until the fall of man
rendered the cultivation of the soil a matter of painful duty, instead
of pleasant recreation.
I asked my friend who had lived among the peasants and studied
them for years what they thought of things in general. He said that in
this village they had never been inclined to loot (looting can always
arise from the gathering together of six drunken men), that they are
perfectly conscious of what is happening (my friend is one of the
most impartial and fair-minded men alive); they are distrustful and
they say little; but they know. As we were talking of these things I
mentioned the fact that a statement I had made in print about the
peasants in this village and in Russia generally reading Milton’s
“Paradise Lost” had been received with interest in England and in
some quarters with incredulity. It was in this very village and from
the same friend, who had been a teacher there for more than twenty
years, that I first heard of this. It was afterwards confirmed by my
own experience.
“Who denies it?” he asked. “Russians or Englishmen?”
“Englishmen,” I answered. “But why?” he said. “I have only read it
myself once long ago, but I should have thought that it was obvious
that such a work would be likely to make a strong impression.”
I explained that at first sight it appeared to Englishmen incredible
that Russian peasants, who were known to be so backward in many
things, should have taken a fancy to a work which was considered as
a touchstone of rare literary taste in England. I alluded to the
difficulties of the classicism of the style—the scholarly quality of the
verse.
“But is it written in verse?” he asked. And when I explained to him
that “Paradise Lost” was as literary a work as the Æneid he perfectly
understood the incredulity of the English public. As a matter of fact,
it is not at all difficult to understand and even to explain why the
Russian peasant likes “Paradise Lost.” It is popular in exactly the
same way as Bunyan’s “Pilgrim’s Progress” has always been popular
in England. Was it not Dr. Johnson who said that Bunyan’s work was
great because, while it appealed to the most refined critical palate, it
was understood and enjoyed by the simplest of men, by babes and
sucklings? This remark applies to the case of “Paradise Lost” and the
Russian peasant. The fact therefore is not surprising, as would be, for
instance, the admiration of Tommy Atkins for a translation of
Lucretius. It is no more and no less surprising than the popularity of
Bunyan or of any epic story or fairy tale. When people laugh and say
that these tastes are the inventions of essayists they forget that the
epics of the world were the supply resulting from the demand caused
by the deeply-rooted desire of human nature for stories—long stories
of heroic deeds in verse; the further you go back the more plainly this
demand and supply is manifest. Therefore in Russia among the
peasants, a great many of whom cannot read, the desire for epics is
strong at this moment. And those who can read prefer an epic tale to
a modern novel.
Besides this, “Paradise Lost” appeals to the peasants because it is
not only epic, full of fantasy and episode, but also because it is
religious, and, like children, they prefer a story to be true. In
countries where few people read or write, memory flourishes, and in
Russian villages there are regular tellers of fairy tales (skashi) who
hand down from generation to generation fairy tales of incredible
length in prose and in verse.
But to return to my friend the schoolmaster. I asked him if
“Paradise Lost” was still popular in the village. “Yes,” he answered,
“they come and ask me for it every year. Unfortunately,” he added, “I
may not have it in the school library as it is not on the list of books
which are allowed by the censor. It is not forbidden; but it is not on
the official list of books for school use.” Then he said that after all his
experience the taste of the peasants in literature baffled him. “They
will not read modern stories,” he said. “When I ask them why they
like ‘Paradise Lost’ they point to their heart and say, ‘It is near to the
heart; it speaks; you read and a sweetness comes to you.’ Gogol they
do not like. On the other hand they ask for a strange book of
adventures, about a Count or a Baron.” “Baron Munchausen?” I
suggested. “No,” he said, “a Count.” “Not Monte Cristo?” I asked.
“Yes,” he said, “that is it. And what baffles me more than all is that
they like Dostoievski’s ‘Letters from a Dead House.’” (Dostoievski’s
record of his life in prison in Siberia.) Their taste does not to me
personally seem to be so baffling. As for Dostoievski’s book, I am
certain they recognise its great truth, and they feel the sweetness and
simplicity of the writer’s character, and this “speaks” to them also. As
for “Monte Cristo,” is not the beginning of it epical? It was a mistake,
he said, to suppose the peasants were unimaginative. Sometimes this
was manifested in a curious manner. There was a peasant who was
well known as a great drunkard. In one of his fits of drink he
imagined that he had sold his wife to the “Tzar of Turkey,” and that
at midnight her head must be cut off. As the hour drew near he wept
bitterly, said goodbye to his wife, and fetching an axe said with much
lamentation that this terrible deed had to be done because he had
promised her life to the “Tzar of Turkey.” The neighbours eventually
interfered and stopped the execution.

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Horngrens Accounting Global Edition

10th Edition Nobles Test Bank

Learning Objective 9-1

2) A company will have receivables whenever it sells goods or services on credit.

4) A receivable can be described as a monetary claim against a business or an individual.

6) Accounts receivable are also known as trade receivables.

20) Which of the following statements is true?

Credit Card Expense 360

Learning Objective 9-2

6) The following information is from the records of Armadillo Camera Shop:

Accounts receivable, December 31, 2014 $80,000 (debit)

Learning Objective 9-3

1) The allowance method violates the matching principle.

9) The aging-of-receivables method is a balance sheet approach of estimating uncollectible accounts.

Accounts receivable, December 31, 2015 $20,000 (debit)

14) GAAP requires most companies to use the:

$250,000 × 0.02 = $5,000

*$15,000 - $9000 = $6,000

$15,000 + $9,000 = $24,000

Accounts Receivable, December 31, 2015 $40,000 (debit)

Calculations: $175,000 × .03 = $5,250

Accounts Receivable, December 31, 2015 $40,000 (debit)

Accounts Receivable, December 31, 2015 $40,000 (debit)

Accounts Receivable, December 31, 2015 $40,000 (debit)

Calculations: $25,000 + $18,000 - $5,000 = $38,000.

$3,000 - $1,200 = $1,800

Explanation: Calculations: $200 + $650 = $850

4) Interest rates are generally stated on a monthly basis.

13) The maturity value of a note is the:

Explanation: Calculations: ($6,000 × 15%) × 2/12 = $150

Learning Objective 9-5

1) The acid-test ratio is also known as the quick ratio.

5) Days' sales in receivables is also known as the collection period.

6) An acid-test ratio of 1.0 is considered safer than a ratio of 0.50.

19) Which of the following is true of days' sales in receivables?

21) The accounts receivable turnover ratio measures:

St. Petersburg, February 24th.

They are celebrating the 25th anniversary of the death of

Moscow, March 11th.

Sosnofka, Government of Tambov,

Moscow, April 6th.

I have spent twelve instructive days in the country; instructive,

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